||Proposal should be submitted for consideration of appropriate authority in whose delegation the sub-limit (Production Credit and Investment Credit) / aggregate limit falls, as per extant guidelines on Delegation of Powers.
- For regular production line of credit limit, no specific margin is prescribed and limit is to be made available to the farmers as regular Cash Credit facility.
- On investment credit, 15 to 25% margin of total cost/investment is to be contributed. In deserving cases, 10% margin may be allowed.
- The RBI norms on margin should be strictly adhered to.
|TECHNICAL FEASIBILITY / FINANCIAL VIABILITY:
- Since the limit is decided on the basis of value of security and projected average annual farm income, Branches should assess the farm income critically.
- Once the overall limit vis-à-vis borrower’s repaying capacity is assessed, choice in priorities of investments based on the farmer’s own felt needs be allowed.
- The Branches should extend needbased guidance to the farmers as and when sought for.
- In case of investment project with larger financial outlays, borrowers may be advised to take prior clearance from the Branch for the same.
- Hypothecation of standing crops, already owned movable assets and assets to be created out of Bank’s finance.
- Charge on land under Agricultural Credit Act/mortgage of land/collateral security or third party guarantee of adequate worth, if necessary.
- The total value of security (existing + proposed) should be around 150% of the loan component including hypothecation of movable assets/standing crops, etc.
- In case the value of land mortgaged is adequate, no other security should be insisted upon.
- If alternate collateral security is available in the form of pledge of TDRs of our Bank/NSCs/KVPs, etc. or gold ornaments, the Zonal Manager may consider waiver of mortgage on merit of each case above the limit of collateral free loans stipulated by RBI.
- The RBI norms on security should be strictly adhered to.
- D. P. Note for entire credit facility.
- Deed of Composite Hypothecation Agreement (CHA-1 / CHA-2) for entire credit facilities.
- Letter of Authority (AG-15).
- Charge on land as per Agricultural Credit Act or Equitable mortgage or Legal Mortgage of land (CHA-4) for entire credit facilities.
- Documents for pledge of TDRs/NSCs/KVPs/Gold ornaments.
- L-516 (if required).